Court Dismisses Claim of Breach of Fiduciary Duty by
IBM

September 15, 2004 (PLANSPONSOR.com) - A federal
judge has dismissed a case against International Business
Machines Corp. (IBM) that accused the company of breaching
its fiduciary duties in paying out benefits to a deceased
worker's children and not his wife.

>Rosemary Gassner, the wife of former IBM employee
Patrick Jeffrey Gassner, had claimed that IBM had breached
its duties under the Employee Retirement Income Security
Act (ERISA) when it refused to validate a beneficiary
change .US District Juge Ronald Guzman of the US District
Court for Northern Illinois ruled that IBM had followed
proper plan procedure, when, in the weeks before Patrick
Gassner’s death, it notified him that his change of
beneficiary designation form was invalid. Thus, the claim
was dismissed.

>Patrick Gassner was an employee of IBM from 1996
until 1998, at which time he was diagnosed with end-term
liver disease. At the time, the beneficiaries of his
company life insurance plan were his two children. When he
was married in June 2000, Patrick Gassner
requested a change of beneficiary form, and was promptly
provided with it by IBM. However, when it was resubmitted,
IBM refused to validate the change due to illegible writing
and incorrect date verification. IBM immediately notified
Patrick Gassner of the problem. Before the problem was
rectified, he passed away.

“It cannot fairly be said that IBM was not acting in the
interest of plan participants and beneficiaries when it so
promptly alerted [the employee] of the problems with the
Designation of Beneficiary Form,” Guzman wrote. The
court cited the following of proper procedural rules by IBM
as a reason to dismiss. It also found that Rosemary Gassner
undercut her own claim by suing her
husband’s attorney for legal malpractice, an act that
court viewed as an implicit admission of the lawyer’s, not
IBM’s, failure.